Correlation Between Bank of China and Telo Genomics
Can any of the company-specific risk be diversified away by investing in both Bank of China and Telo Genomics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank of China and Telo Genomics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of China and Telo Genomics Corp, you can compare the effects of market volatilities on Bank of China and Telo Genomics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank of China with a short position of Telo Genomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Telo Genomics.
Diversification Opportunities for Bank of China and Telo Genomics
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Telo is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Telo Genomics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telo Genomics Corp and Bank of China is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank of China are associated (or correlated) with Telo Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telo Genomics Corp has no effect on the direction of Bank of China i.e., Bank of China and Telo Genomics go up and down completely randomly.
Pair Corralation between Bank of China and Telo Genomics
Assuming the 90 days horizon Bank of China is expected to generate 2.71 times less return on investment than Telo Genomics. But when comparing it to its historical volatility, Bank of China is 2.75 times less risky than Telo Genomics. It trades about 0.07 of its potential returns per unit of risk. Telo Genomics Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Telo Genomics Corp on August 29, 2024 and sell it today you would lose (12.10) from holding Telo Genomics Corp or give up 67.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Telo Genomics Corp
Performance |
| Timeline |
| Bank of China |
| Telo Genomics Corp |
Bank of China and Telo Genomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Telo Genomics
The main advantage of trading using opposite Bank of China and Telo Genomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Telo Genomics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Telo Genomics will offset losses from the drop in Telo Genomics' long position.| Bank of China vs. HomeToGo SE | Bank of China vs. INVITATION HOMES DL | Bank of China vs. LG Electronics | Bank of China vs. Neinor Homes SA |
| Telo Genomics vs. SANOK RUBBER ZY | Telo Genomics vs. Singapore Airlines Limited | Telo Genomics vs. SINGAPORE AIRLINES | Telo Genomics vs. Martin Marietta Materials |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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